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October 31, 2014     Heritage Florida Jewish News
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October 31, 2014

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HERITAGE FLORIDA JEWISH NEWS, OCTOBER 31, 2014 PAGE 7B (BPT)--The first months of the school year are full of new lessons and experi- ences for children. While subjects like history, science and math aim-to prepare kids for college and careers, there's one vitally important educational goal that falls to parents~to fulfill--financial education. Parents are kids' number one resource for learning about money. Fifty-one percent of Generation Z children report they were taught financial lessons from their parents, accord- ing to a recent survey by TD Ameritrade Holding Corpo- ration (NYSE: AMTD). Only 10 percent said they learned financial lessons from a teacher or school course, and only 7 percent gained their information from websites and blogs. "According to the sur- vey, the average age when children begin learning the importance of savings is 15," says Lule Demmissie, managing director of retire- ment for TD Ameritrade. "But there's no need to wait. Even younger children can benefit from early conver- sations about credit cards, retirement planning, saving and investing. Our research shows that children whose parents talk to them about financial responsibility at an early age are more likely to see saving as important, and develop good budgeting habits as adults." The TD Ameritrade survey found children need a little extra guidance when it comes to managing credit card debt, saving for retirement and understanding the best ways to invest: Older members of Gen Z are accruing credit card debt, with just 43 percent of Gen Z respondents saying they pay off their credit card bills every month, down from 59 percent in last year's Gen Z survey. Most kids anticipate their adult financial priorities will be finding a job, buying a car, paying off student debt, get- ting married, buying a home and saving for retirement--in that order. Just 17 percent say the best way to plan for retire- ment is investing in the stock market, while 47 percent believe that a savings account is the best way to prepare for retirement. "Back-to-school time pres- ent parents with the perfect opportunity to begin sharing financial lessons with their children," Demmissie says. Here are some ideas for parents who are looking to help their children establish good money-management skills now and in the future: Establish good savings habits early Explain to children the importance of savings, and how saving money can help protect them when they ex- perience things like job loss or unexpected car repairs. Help them understand how to balance expenses and income, and the difference between a "need" and a "want." This can help them understand what they can realistically afford. As part of this lesson, it's important to teach them how to create and follow a budget, so they can avoid getting into debt. Don't forget technology can also be a valuable tool to help teach those lessons. There are several budgeting and financial apps available that are geared towards kids. Model the behaviors you want them to learn Show children how your own family budget shapes up every month--a portion for s.avings, for investing, for gas, household expenses, etc. When your child asks for spending money, rather than just handing it over, estab- lish a lending arrangement. Agree on repayment terms, including interest, and help your child understand how to make payments and how long it will take to repay. This experience of showing rather than telling can work well when educating kids about money concepts that may be a bit more difficult to grasp like managing debt or budgeting. Discuss balance Trade-offs and sacrifices are essential elements of money management. You can help kids grasp these con- cepts through application. For example, if your daughter wants to buy a $500 tablet but has only $200 saved, help her examine how she can make up the shortfall. Will she work for the money? How long will she need to work in order to get $300? What other purchases or expenses (like a weekly movie) will she need to give up in order to save the money and reach her goal? Share your experiences Everyone makes mis- takes-such as racking up too much credit card debt in college or waiting until your 30s to begin saving or invest- ing for retirement. Hopefully you've learned from your mistakes and can share the benefit of that knowledge with'your children early. Be honest with your kids about the financial mistakes you've made, what you learned from them and how they can avoid making similar mistakes. "The more parents can teach their children about money and help them under- stand things like establishing a monthly budget or the importance of good credit, the more kids will be able use those lessons when making solo financial decisions in the future," Demmissie says. For more tips on how to talk to kids about money, visit TD Ameritrade's Education Center at www.tdameritrade. com/ Provided by: TD Ameri- trade Holding Corporation, brokerage services provided by TD Ameritrade, Inc. mem- ber FINRA/SIPC (BPT)--One of the ques- tions most often asked about credit cards is how they can impact your credit score. With so many different types of credit cards now available, it;s no wonder consumers have lots of questions. Here are five credit card best practices from Vantage- Score Solutions, the com- pany behind theVantageScore credit scoring model, to help you pay down your outstand- ing debt and improve your score for the months ahead. Start small. One of the best ways to establish credit is to apply for a credit card with a low limit. Keep mak- ing on-time payments and your credit score is likely to improve. Once you have established a track record of managing your credit card account wisely, ask the card issuer for a larger credit line. Credit scoring models look at the total amount of credit you have available, so a higher limit can also have a positive impact on your credit score. In fact, if yon manage your credit card properly the card issuer may increase your credit hmit without even having to ask. Don't charge more than you can pay off by the due date. This is perhaps the most obvious yet also most important credit card best practice. The average interest rate on credit cards is around (StatePoint) If you're a homeowner, you probably know that refinancing could mean lower monthly pay- ments, lower interest rates and a shorter-term loan. However, if your mortgage is underwater, a refinance is hard to come by and you may have been turned down in the past. But don't despairj ust yet. A government initiative, introduced by the Federal Housing Finance Agency, 15 percent, which is probably going to be the most expen- sive debt you'll ever carry, so maintaining a low balance each month helps to improve both your budget and your credit score. Remember the purchase you made with your credit card because it seemed like a good deal? Well, it ceases to be a great deal if you have to pay interest on it month after month. And the balance you have on your credit card can have significant negative impact on your credit score if it's a large percentage of your total amount of credit available. VantageScore Solu- tions recommends keeping balances under 30 percent of the limit for any given card. Think of your credit score as a snapshot in time. If that snapshot includes a sig- nificant credit card balance, it could have a negative effect on your credit score. Remember to pay off your balance early, or at worst make significant payments in order keep the balance low if you expectyour credit score will be pulled by a creditor and used to finance a purchase. Here's a trick you can try to help improve your credit scores even more: Pay your credit card bill online even before you receive your statement. Or pay your bill down to zero or below 30 percent a few months ahead of the next time your credit is making it easier to refi- nance. The Home Affordable Refinance Program (HARP) is enabling homeowners who owe almost as much or more than the currentvalue of their homes to take advantage of the long-term benefits of refinancing. With recent program modifications and interest rates still at historically low levels, .it is now easier to refinance with HARP, and is checked in anticipation, for example, of applying for a mortgage or financing the purchase of a vehicle. As long as you don't charge anything new it will help to ensure a low balance on your credit reports, and will likely mean an improvement in your credit scores. Don't open up multiple cards within a short time- frame. Each time you apply for a credit card a "credit in- quiry" will be made with one or more of the three national credit reporting companies (Equifax, Experian and Tran- sUnion). Each inquiry can cause your credit score to decline slightly, but it should recover to its previous level in a relatively short time, as long as you haven't exhibited any other risky credit behaviors such as missing a payment. Credit score models generally do allow you to shop for the best rates for certain lines of credit, such as those for auto and home loans, so its ok to have multiple inquiries, as long as they occur within a two-week timeframe--and experts encourage shopping for the best loan terms, even if that means a short term impact on your credit score. Having said that, if you're in the market for a large loan, like a car or home loan, it's a good idea not to open any new accounts until you've closed easier now those who have been turned down in the past may now be eligible. If you are current on your mortgage payments, your loan is backed by Fannie Mae or Freddie Mac, and you have little or negative equity in your home, youmay be eligible for HARP. To find out more infor- mation, visit Before resigningyourselfto high interest rates, take a look at available options. on the loan. Hold on to your credit card for a while. The longer you have a~credit card with consistent on-time payments, the better it is from a credit scoring standpoint. Credit scoring models like to see that you are a good credit manager over a long period of time. One common myth about credit scores is that they will improve if you close credit card accounts. Not only is that untrue, but closing unused credit card accounts could actually cause your scores to drop. Buying a new home or car or taking out a loan to continue your education can be some of the most exciting financial decisions of your life, and also some of the most important. A strong credit score can mean the difference between receiving a great financing rate and no financing at all, so make sure your score is ready to help you when you need it most. To learn more about your credit score and how to improve it, visit Test your knowledge about credit scores at http://www., which was created by VantageScore Solutions along with its part- ner, Consumer Federation of America. Both the online quiz and a corresponding brochure are available in Spanish at Espanol. Presents The blication Date cernber 12, 2014 Deadline: November 9, 2014 A Chanukah Greeting is a Good Way to Thank Your Jewish Customers for Their Patronage or to Sell Your Holiday Merchandise For More Information Call 407-834-8787 LT~'